By Damion Mitchell, Staff ReporterCOFFEE INTERESTS said yesterday that the discontinuation of the Coffee Industry Board's (CIB) Crop Insurance Scheme could be 'very costly'.
"It is unfortunate that this had to be the situation," said O'Neil Blake, manager of the Blue Mountain Coffee Co-operative that operates the Moy Hall Coffee Factory in St. Thomas. He further said premiums on the commercial market would be higher if farmers chose to register with insurance companies to compensate them in the event that their crops are destroyed in a disaster.
SMALL COFFEE FARMERS DOUBTFUL
Harvey McPherson, 54, a coffee farmer from Cedar Valley in St. Thomas, also told The Gleaner that it was doubtful that many small coffee farmers would be able to insure their crops, as they would not be able to afford the insurance premiums on the commercial market.
He said it was important that the situation be resolved speedily, especially given that the current hurricane season meant a greater risk for crops to be destroyed.
LACK OF CONFORMITY
Yesterday, Errol Ennis, Minister of State in the Ministry of Agriculture, announced at a press briefing at the Ministry's Hope Gardens offices in St. Andrew that the scheme, formulated in 1992 under a trust deed, would be terminated next month because it does not conform with the Insurance Act of 2001.
Dave Garcia, attorney-at-law at Myers, Fletcher and Gordon, explained that the Act makes it illegal for non-insurance entities, such as the CIB, to offer insurance services.
He said, however, that it was not until about a month ago that the CIB discovered that its scheme was in breach of the Act, threatening to affect some 25,000 coffee farmers islandwide who will no longer be able to claim compensation from the CIB in the event that there are catastrophes.
The farmers had contributed to this fund through their coffee processors, who deducted a cess from the monies paid out to them for each box of coffee to be forwarded to the CIB.
Yesterday, Richard Downer, chairman of the CIB Regulatory Division, said the organisation was making alternative arrangements to the Crop Insurance Scheme currently valued at $36 million. According to him, an application has been filed in the Supreme Court to dissolve the fund, with the hearing slated for August 4.
In the short term, the board will be making arrangements for the purchasing of commercial insurance.
